Obama to Insist on Tax Increase for the Wealthy

WASHINGTON — President Obama said Friday that he would insist that tax increases on affluent Americans be part of any agreement to avoid a year-end fiscal crisis, setting up a possible confrontation with Congressional Republicans who say they will oppose a rise in tax rates for the rich.

In his first remarks from the White House since his re-election, Mr. Obama made it clear that he believed his victory had validated his relentless campaign call for wealthier Americans to pay more and that he expected Republicans to heed that message.

“I just want to point out this was a central question during the election,” he said in brief remarks in the East Room. “It was debated over and over again. And on Tuesday night, we found out that the majority of Americans agree with my approach.”

Mr. Obama said he had invited Congressional leaders to the White House next week to begin talks as they return for a lame-duck session of Congress. He said he was willing to make some concessions as long as the final fiscal bargain was properly balanced between new tax revenue and spending cuts.

“While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody — not Republicans, not Democrats — want taxes to go up for folks making under $250,000 a year,” he said. “So let’s not wait.”

The president’s comments came shortly after Speaker John A. Boehner, who had been striking a conciliatory tone since Republican election losses in the Senate and the House, told reporters that Republicans had won a mandate of their own by retaining control of the House and that he supported continuing rates enacted in the Bush-era tax cuts for all income levels.

“Raising tax rates will slow down our ability to create the jobs that everyone says they want,” said Mr. Boehner, who said he favored generating any new federal revenue to offset the deficit by closing tax loopholes and limiting deductions.

“It’s clear that there are a lot of special interest loopholes in the tax code, both corporate and personal,” he said. “It’s also clear that there are all kinds of deductions, some of which make sense; others don’t. And by lowering rates and cleaning up the tax code, we know we’re going to get more economic growth.”

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President Obama made a statement in the East Room of the White House on Friday.Credit
Doug Mills/The New York Times

The president and Mr. Boehner were careful with their language and left room for compromise despite their fundamental differences about shifting more of the tax burden to high-income Americans. Mr. Boehner would not be very specific on what his goal might be for raising new federal tax dollars.

“I don’t want to box myself in,” he said. “I don’t want to box anybody else in. I think it’s important for us to come to an agreement with the president. But this is his opportunity to lead.”

The speaker, who has struggled with his more conservative rank and file in the past, said he was confident that he could pass a deal if one was reached with the White House. “When the president and I have been able to come to an agreement, there has been no problem getting it passed here in the House,” he said.

House Republican leadership aides found some positive signals in Mr. Obama’s combative tone. They noted that he never specified he wants tax rates to rise, only that he wants additional revenues generated by taxes on the rich. That would give both sides the latitude to devise a restructured tax code that eliminates or limits tax deductions and credits for the rich — or that follows Mitt Romney’s proposal to cap deductions at a set limit for rich households, though many analysts say that approach alone cannot raise the revenue Democrats want.

Any agreement to avert a fiscal crisis in January, when hundreds of billions of dollars in automatic tax increases and spending cuts kick in, now revolves around the definition of tax increases. Mr. Boehner is holding the line against any increase in tax rates, even for the richest Americans, who currently are in the 35 percent tax bracket. But he is leaving open the possibility of a tax overhaul that raises more revenue than the existing code.

Representative Steny H. Hoyer of Maryland, the No. 2 Democrat, echoed the view at the White House that Americans want to see taxes on the wealthy go up. In a statement after Mr. Obama spoke, Mr. Hoyer said that “on Tuesday, the American people made it clear that they support a balanced approach to bring down deficits and set our nation back on a sound fiscal path — one that does not ask working families and those struggling to get by to bear the burden of deficit reduction, but instead asks the wealthiest Americans to pay their fair share.”

While Mr. Obama was careful not to demand that tax rates rise, Jay Carney, the White House press secretary, said just an hour later that the president would veto any legislation extending the expiring tax cuts for families making $250,000 or more.

For all the talk of compromise, neither side offered any suggestion of where it might back down. While both sides agree on the need to avoid triggering the automatic tax increases and spending cuts that occur if there is no deal — and there is deep concern that failure could harm the economy — the shape of a final compromise remains unclear. New reports this week by the Congressional Budget Office found that the automatic tax increases and spending cuts would cut the deficit by $503 billion through next September. But the reports said that the austerity could cause the economy to shrink by 0.5 percent next year, and would lead to the loss of millions of jobs.

The Congressional leaders will be heading to the White House on Friday, administration officials said, just before Mr. Obama leaves for Cambodia, Myanmar and Thailand, where he will attend economic meetings with world leaders. He is certain to come under pressure there to reach a deal with Republicans since the American economy is doing better than most other global economies, and a slowdown in the United States is widely viewed as potentially catastrophic to the global economy.

“It’s time to get back to work,” the president said at the White House. “And there is plenty of work to do.”

A version of this article appears in print on November 10, 2012, on page A1 of the New York edition with the headline: Obama to Insist on Tax Increase for the Wealthy. Order Reprints|Today's Paper|Subscribe